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Bulls and Bears

News/Business. The latest market news; the week ahead on Wall Street. New. (CC)

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00:31:00

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Us 5, Jonas 4, John 3, Europe 3, U.s. 3, Syria 3, Gary B 3, America 3, Jamie Colby 2, The S & P 2, Brenda 2, Obama 2, United States 2, Neil Cavuto 2, Dennis 2, Washington 2, France 2, Maryland 2, Scottrade 1, Eric 1,
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  FOX News    Bulls and Bears    News/Business. The latest market news;  
   the week ahead on Wall Street. New. (CC)  

    May 4, 2013
    7:00 - 7:31am PDT  

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we'll be checking in with her. you can log on to our web side of the for the after the show show. >> happy national burger month, everyone. >> can i drink this beer? >> yes, you may. >> excellent. >> we're celebrating the next 30 days. the dow briefly crossing 15,000 for the first time ever, up more than 14% this year alone. s & p 500 right behind it, closing above 1600 for the first time ever on friday. investors cheering a better than expected jobs report. the unemployment rate at the lowest level in four years, but still high historically. so wall street sure firing on all cylinders. but are you feeling it on main street? hi, everyone. i'm brenda buttoner. this is "bulls & bears." the "bulls & bears" this week, our guests are here. welcome to everybody. john, stocks racing, but the
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economy stalling? >> yes. that is exactly the point. look, you said the stocks are on fire. they have been on fire. there is obviously a disconnect. the economy, you can not say, no one will say the last three years has been on fire. with the fed pumping money, with zero interest rates, the rich get richer, the poor get poor. we have the highest poverty rate -- more people in poverty in the history of our country. we're seeing the market take off. there is a huge disconnect between the two and that's not going to change with the lowest labor force participation rate, consumer driving 70% of the economy. >> susan, there are some good things out there, right? the housing market has found its foundation. we did have a solid jobs report and we had high revisions for the last couple of months. so is main street feeling this, too, or is it all wall street? >> no, it's starting to get better. people have been eulogizing this economy for months and it's just not as bad -- >> that's a big word. [ laughter ]
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>> and it's just not as bad as people are saying it is. we had a 2.5% gdp number for first quarter, which is not gang busters burks solid. we've now averaging, over the past six months, 200,000 new jobs every month for the past six months. again, it's not stalled out. it's not falling off a cliff. it could be better and we want it to be better. but we are seeing good strong hot spots here. >> so gary b, susan basically says there has been a funeral for this economy for a while. do you see a disconnect between wall street -- >> was this a eulogy? >> first of all, brenda, welcome back. nice to have you back in the hot seat. >> oh, thank you. >> as far as is there a disconnect, yes, there is a disconnect between reality and what susan is saying. look, susan says, oh, things are getting better, these numbers, blah, blah. the one number i look at as always is the employment number. not that 7.5%, the other number that accounts for people that have just given up. that number actually went up to
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13.6%. so if the economy is so great, you actually have less people working than you should given the population growth and everything. i think the economy is in the doll drums. i think john layfield has it right. listen, if you have 100% of your assets in the stock market, you're cheering. how many people have 100% of their assets in the stock market? >> toby, john made a good point because all these she -- things going on in washington, the market doesn't care because as long as it's got uncle ben, as long as the fed keeps feeding this market and feeding this rally, it will keep going, won't it? >> the disconnect, no question, that the economy is not recovering. it's 50% less recovery than any other recovery we've had. but at the same time, in the last recoveries we had, we had inflation, we had normal interest rates. we have actually negative rates. people have to pay money to give money to the fed. when you put 85 billion a year,
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it's not only the american fed. it's the japanese. they're going to double their inflation rate. we have europe, almost every federal reserve creating this money. it has to go somewhere. what's intriguing is people know that bonds are too expensive because they've been priced basically in a bubble. so now the same people who bought bonds are now buying stocks that pay dividends as a replacement for bonds. that's what's making this market go up when the economy feels so in a slump. >> wall street clearly racing. but what about the economy? >> it's a good enough economy. that's exactly why the market is taking off is we're not going to have a depression. we don't need to hide in the negative return assets whether it be cash or short-term bonds and this 2 1/2 percent gdp is the largest economy in the world that grows that fast other than china. so there is no one else to go. the other economies are much worse off. you can't just sit losing money in cash your whole life. so it's way over 100% from the crash. people are deciding we're not
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going to lose all of it in some depression. so game is on. >> john, is this rally for real? the bulls have to take a breather at some point. they've gone so far, so fast. >> oh, sure they do. but traditionally the market is still low, according to valuation. and it should probably deserve a premium because there is safety in the u.s. markets compared to other things that are going on, especially in europe right now. i think the market does have legs going forward. the thing is, what is so good about it? if you ask somebody, are things good? you go, well, they're better than they were. okay, things were terrible. then you ask somebody, are they bad? well, they're not really that bad. they're not good. they're not bad. all the numbers are exactly the same. they're right in the middle line. gdp, employment numbers, they're not good, they're not bad. that shows we have a very sluggish economy and i don't see anything that's going to change that going forward. >> john, there is a big difference. the s & p 500, 500 largest stocks, the last time they were this high they had about $54 of
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combined earnings for all those companies. right now they're at 56. so we have almost twice the earning and basically at the same level we were at record mights in 07. so clearly -- that was even before 2002. so clearly we have more underpinnings in this market. the problem is all that prosperity has come with revenues not going up over the last 12 months. it's actually down 4%. so we're getting more earnings, we're not getting the revenue. >> we're also seeing productivity gains. so you're seeing that companies are increase not guilty profits, but not hiring more people. so there is a little of that disconnect that gary b was talk being. >> gary b, who cares if the market keeps going up? >> hooo! >> i care. anyone that's associated with wall street and the continual -- >> no, if the market keeps going up, who cares what happens with the economy? can't it keep going up? >> the 13.6% unemployment. most people don't really --
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unless they have a lot of money in the 401(k), you know, we have about half this country that has no connection to the market at all. yes, for us kind of inside the beltway people and inside the financial community, it's rally time. we're putting on a 15 k hats. i'm speaking to the average person out there and particularly the 13, 14% that don't have jobs. they don't care if the market was at 25,000. >> right. very good point. investors are making a lot of money, jonas, but workers? >> i don't know if i buy that because a very hot market will create jobs in itself. the market did go up to your point. at some point, if they're going to hire just because of high stock valuation, we saw that in the '90s. is that sustainable, could it crash? sure. is it good for hiring people? yes. but you work for these companies and their stocks do better. they have more money to spend
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and so everybody benefit. >> whoa, whoa, how does the companies have more money to spend? >> they do stock offering as, borrow money. >> you can raise money as a start-up company knowing you can go public at a higher valuation later. >> no, i understand that. but it's not like they're doing these stock offering a, oh, my gosh, stock is up 25%. let's do another stock offering a. those are far and few between. i don't think there is much connection. >> they could go public and do a nasdaq 5,000 situation. >> i understand, that's the one exception. the internet bubble that created jobs and what happened next? >> you have a different story to tell. >> and toby, there is a wealth effect, of course, because the s & p 500, up to 1600, that's in the 401(k). >> but look at homes in the last
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30 days, stock prices, home prices do create economic prosperity for some. not all. >> okay. >> you sound like the administration. you're turning to your jobs plan is okay, these companies have a lot of money and their stock product goes up. you need to hire people you don't need. doesn't work. >> okay. that's the last word. so remember this? >> sequester is harmful. >> unemployment rate might tick up again. >> well, clearly those sequester cuts didn't hurt jobs. so time for washington to stop the fear mongering? neil and the gang are on it at the bottom of the hour. up first, jobs may be ticking up, but benefits, oh, oh. >> if you like your health care plan, you'll be able to keep your health care plan. >> our new numbers this week suggesting otherwise at od, whatever business you're in, that's the business we're in
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hi, everyone. we are live from america's news headquarters. i'm jamie colby. at this hour, it's a race
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against time in southern california, trying to put out a wildfire that is nearly tripled in size. this picture pretty much captures the horror. there is a man standing on the top of his roof staring at the raging flames. the crews are hoping better temperatures today will make it a little easier to contain the fires. already hundreds have been evacuated and some 4,000 homes are in danger. thankfully and miraculously, no injuries reported so far. overseas, israel launching a air strike into syria, target ago suspected weapons site. according to top u.s. officials, we are told the goal is to stop a shipment of missiles in syria bound for hezbollah and neighboring lebanon and president obama is all but ruling out sending u.s. troops into syria. meanwhile, we will have more headlines for you 30 minutes away. i'm jamie colby. >> asked if he's worried about a train wreck ahead for his health care law, the president says this. >> even if we do everything
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perfectly, there will still be glitches and bumps. >> how about this for a bump? more and more employers are bumping some workers' benefits and cutting some full time workers to part-time, all because of the health care law. toby, we've been warning this would happen. just how bad is it going to get? >> it's not a bump. it's a sink hole and if you just look at the last three months and i'll take it forward, you'll see probably 3 million jobs eliminated in the united states simply because it's not worth hiring those people at the margin. even worse, gary is worried about these personally employed people. when france did this, they went from the smallest to the largest amount of 49 companies in the world. united states, we're going to probably add another 3 or 400,000 companies that only have magically, 49 employees. that means they're going to lose everyone on the margin they can get rid of. this is horrible. >> susan, you worried about this? >> now we're france all of a sudden? >> yes. >> the issue here is that we
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have seen these kind of things before, well before obamacare ever existed. remember in 2005 there was that internal memo from wal-mart specifically saying one way to save on health care costs is by cutting back workers' hours so they're no longer eligible. this has been going on for a long time. it will continue to go on the ground upon a long time regardless of obamacare. >> oh. >> that said, part of the whole point of the law is create these state-based markets so people can go out into the individual market and buy health insurance and they don't have to be dependent on the employer. >> under this health care law to cut workers and to cut benefits. >> absolutely. make them all part-time or cut back on their hours. it's a simple, the stick and the carrot. here is the carrot. i want to save money. if you've been covered by health care, i can tell you what's happening in maryland, which is supposed to be at the forefront of this whole statewide agency kind of thing.
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blue cross blue shield in maryland has already said, we expect premiums, gary b smith, to go up 25% next year. now, i'm already paying a heck of a lot 'cause i'm not covered by any company. could you imagine having a family of four out there. you pay a little bit each month. now the company cuts you off and now you have to go pay 2, 3,000, maybe $4,000 a year in coverage. it's going to hurt. >> jonas, where do you see this going? >> in susan's point, obama just added trains to an already existing train wreck. the whole notion is everyone is acting like employer-based health care is a good system. if you want jobs in an economy, then an employer should be able to hire somebody and just have to pay them a paycheck. there shouldn't be a pension or 401(k). there shouldn't be a health care plan. that is all additional cost. it discouraged hiring. it's where you've had a multi
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decade trend toward temping. ridiculous system which is you got to provide all these other things. maybe you have to provide a car so he can get to work. you want to fix it, get people in charge of their own health care. there was some of that under the bush administration with the health savings account. it never really went anywhere. there is some of it here with the state plans. maybe that will work. but a you will i know is as an employer, i want to write a paycheck. >> that's not going to happen any time soon of the john, just looking forward, what do you see the health care law doing to benefits? how are we as american workers going to feel this? >> you're going to feel it by exactly what everybody is talking about. jonas was spot on as he usually is and with a great analogy. >> come on, john. >> okay. that's too much. but jonas was absolutely correct. look, you have a broken system. instead of fixing a broken system, all we did was add 30 to 50 million people to that broken system. all that does is exacerbate the fractures. we highlight a guy who owned several denny's several months
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ago here. he said if i have to pay an extra 4 to $5,000 per employee, that's all the profit i made for that store. he said, i have no choice but to cut them back down to 28 hours underneath that 30 hour limit. that's what you're going to see all over america. >> gary b, go ahead? >> well, look, i agree with john. i think the person we should be sucking up to is you and not jonas. so i don't know why he did that. [ laughter ] here is the thing, we had started this whole obamacare was to cover all these uninsured people. now we're not even going to be doing that! >> okay. that's got to be the last word. you get your own segment. coming up, gary b, thanks. more money to avoid a health care law train wreck. that's what top democrat harry reid is calling form should he get it? eric and the "cashin' in" crew on it at 11:30. but up next, may day protesters turning violent. and turning their anger towards
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capitalism. but should they be pointing their finger at themselves we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪
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upper belly pain, dark urine or yellowing of skin or eyes. these could be signs of rare but serious side effects. is your cholesterol at goal? ask your doctor about crestor. [ female announcer ] if you can't afford your medication, astrazeneca may be able to help. >> coming up, anti-capitalism here in the united states. a lesson in capitalism for the protesters. 20% of americans getting enough exercise and we've got the name that could ha
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sleepless in seattle. may day protests turning into anti-capitalism vie license in the emerald city as some businesses come under attack. someone here says capitalism isn't the problem. it's these guys refusing to get off their butts and do something. is that the problem, gary b? >> absolutely, brenda. if you zoomed in on that video, i bet half that group, they're
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wearing north face jackets, carrying iphones and are against capitalism. they need to get a job if they don't already have one. and second, if they hate capitalism so much, move to a nice socialist country like spain where the unemployment rate is 27%. let's see how long they last there. >> susan, what's your take on this? >> most of these demonstrations are really about workers' rights. they're not necessarily trying to take down capitalism. and the irony here is that workers and companies need each other. so there has to be sort of this happy middle ground. it's always unfortunate when they turn violent. but they are valid issues around workers' rights that we need to deal with. >> i don't know, john, they seem pretty mad. >> this isn't about workers' rights. this is about idiots. absolutely idiots. you need a take a singapore cane and tan their back sides 'til skin flies off. you take a rock or fire and you try to burn somebody's business that they spent their life
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building, ship these guys to cuba, see how they like communism. these guys are morons and don't deserve to be in this country. >> jonas? >> they actually have more protests in the socialized countries right now. look, capitalism is the best way to run a country. there is just no question about it. however, it can disenfranchise people in mature states, like we are now. about two-thirds in our country is not going to see pay raise go up and it hasn't for multi decades, adjusting for inflation. it can lead to revolt and the whole system could collapse in on itself. there are solutions to keep the system going and not going like europe where all of a sudden, and redistribute and that is progressive taxes, which we have in america and other taxes and things radio -- appears to be a dead end job, working and not rioting in the streets. >> i don't know. toby? >> i thought we were on the wwe with layfield. but the biggest issue is how ironic is it that in the town of
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gates and great entrepreneurs, you realize they would all be working if they had jobs who are boeing or throwing salmon at the market if they didn't have entrepreneurs and capitalism. for those guys to do this, i think half of these guys are paid to do this anyway. i think this is a bogus deal all the way around. >> okay. john, i'll give you the last word here [ laughter ] i don't know about wwe, they would actual will he be happy if they had a job there. these guys need a job. people with jobs don't do stuff like this. it's that simple. toby is right. they're getting paid. they're trouble makers. >> thanks so much. and thanks to susan for joining us. a whopping 80% of american adults not doing one thing that could cost us all. get the name that could capitalize on that one thing and make us all a bundle at the same time (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking,
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>> predictions and we've got gary b.
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>> i'm going to disney world this summer. i'm going to have a ball. telling you one thing, the stock is bound to go up now. up 30% by the end of the year. >> if you're there, it will go up. john, bull or bear? >> i'm a bull. gary b, i'm a bear on mickey mouse. >> yahoo's new video content, a real game changer. they might want the jb show. i think it doubles the next three years. >> gary b? >> at this not even know yahoo was still around. >> the only thing hotter than brenda's outfit today is tesla automobile, electric vehicle up 50% over the next year. >> it will be the toby show next week. jonas, bull or bear? >> i want the expensive car. >> the 80% are good clients for lazy boy, up 20% this a year. >> there he goes.
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toby, bull or bear? >> the only thing lazy here is you and that bone head prediction. >> you know who is not lazy? the hardest working man on tv, neil cavuto, up next cuts of this size made this quickly, lose jobs, slow the growth of our economy. >> sequestration, which has already kicked in, will get worse. >> there is only one way to truly fix the sequester, by replacing it before it causes further damage. >> so much for the further down. so much for any damage. glad to have you. i'm neil cavuto. the economy apparently laughing in the face of all that sequestration devastation. those $85 million in automatic spending cuts, not cutting into the job market. not by a long shot. the government reporting 165,000 jobs are added in april. get this, the two prior months were revised to show 100,000 more americans